McDonald’s Announces Unexpected Sales While Yum! Brand Suffers

McDonald's Corporation (NYSE:MCD) announced a surprise gain in same-store sales for the last month, after increasing advertising for cheaper items following a decline in October.

McDonald's Corporation (NYSE:MCD), which is the world’s largest chain of restaurants, had predicted a drop in US same-store sales of 0.6 percent by analysts – an average calculated from 14 estimates compiled by Consensus Metrix. Same-store sales for the US were instead, up by 2.5 percent in November – well above predictions of both analysts and McDonald’s, which had expected a 0.1 percent gain.

Global same-store sales for the company were seen to increase by 2.4 percent during the same month, the Oak Brook, Illinois-based company announced today in a statement. Analysts had predicted a gain of 0.2 percent, while the company itself had predicted a gain of only 0.1 percent.

The company, which has around 14,100 US stores and more than 34,000 restaurants worldwide, has recently increased its advertising of its Dollar Menu, in order to attract money-conscious Americans.

According to McDonald's Corporation (NYSE:MCD), management attributed the sales success to the new Cheddar Bacon Onion Burger, their breakfast menu, beverages, and the chain’s value items.

Elsewhere in the world, sales were up by 1.4 percent in Europe and 0.6 percent in Asia, Africa, and the Middle East. Analysts had predicted a gain of 0.1 percent and a drop of 0.9 percent, respectively.

The good news came after a worrying month for the company in October, after comparable-store sales fell by 1.8 percent globally – the first monthly decline for nine years. Sales in the US were also down 2.2 percent that month. On the announcement of November’s sales, shares of McDonald’s rose two percent to $90.24 this morning, after falling 10.48 percent throughout the year to December 7.

McDonald's Corporation (NYSE:MCD), which put Don Thompson in the CEO chair in July, is in fierce competition with Burger King Worldwide Inc (NYSE:BKW), and Yum! Brands, Inc. (NYSE:YUM)– who are also currently having a tough time in the market.

Late last month, Yum! Brands, Inc. (NYSE:YUM), owner of KFC, Taco Bell, and Pizza Hut, announced that it was struggling to maintain sales in China – where same-store sales are expected to decline by four percent in the fourth quarter. On the news, Yum!’s stock plunged from their 52-week high of $74.75 to a much reduced $66 per share, where they still are today after their almost 11 percent drop.